Original title: Foxconn: its own semiconductor business will take the direction of "light assets" Source: QQ.com
Bob Chen, vice president of Foxconn Group Semiconductor Sub-Group, said that Foxconn Group's development direction in the semiconductor industry will mainly focus on vertical integration, with the goal of becoming a solution (referring to industry chip products) provider, and will focus its investment on light asset businesses such as chip design.
Tencent Technology News Foxconn Group is the largest consumer electronics contract manufacturer in China and the most important assembly plant for Apple Inc smartphones in the United States. Earlier, Foxconn Group suddenly announced that it would expand its semiconductor business and began the integration of its semiconductor division. There is great interest in how Foxconn will do semiconductors in the future and whether Foxconn can shake up the existing semiconductor market.
At a recent meeting, a senior executive in Foxconn's semiconductor business detailed the group's direction and plans for developing its chip business, according to Taiwan's science and technology media.
Light assets
According to reports, Bob Chen, vice president of Foxconn Group Semiconductor Sub-Group, said that Foxconn Group's development direction in the semiconductor industry will mainly focus on vertical integration, with the goal of becoming a solution (referring to industry chip products) provider, and will focus its investment on light asset businesses such as chip design.
The executive told a semiconductor industry conference in Taiwan that Foxconn aims to become a full-solution provider in everything from integrated circuits to software design. Foxconn will also vertically integrate existing resources and deployments in the areas of semiconductor equipment, packaging and testing, external manufacturing, integrated circuit design, system integration and channels, so as to promote platform modularization and even systematization.
It is reported that Socle Technology, the chip design company of Foxconn Group, has established close cooperation with many semiconductor IP manufacturers, and its chip design customer base has recently expanded beyond Foxconn Group.
Foxconn's semiconductor purchases reached $53 billion in 2018, accounting for 11 per cent of the global semiconductor market, the executive said.
The executive added that a large amount of data from Internet of things devices will need to be processed and analyzed by artificial intelligence systems, which have been widely used in the manufacturing industry, but for most small and medium-sized enterprises, they are still difficult to implement in operation, and Foxconn Industrial Internet is currently developing solutions to help these enterprises.
Boxiedge AI computing solutions developed within Foxconn Group are also used in Internet of things T, healthcare and smart retail applications, he said.
Suddenly pay attention to it
In the middle of last year, Foxconn consolidated several of its semiconductor subsidiaries. The group has newly established a semiconductor industry group, which is responsible for the overall development strategy of the chip business.
According to media reports at the time, Foxconn was still evaluating the construction of a large chip manufacturing plant, or wafer foundry, considering the use of 12-inch wafers.
However, it is well known that the establishment of a production line in semiconductor manufacturing requires a huge investment, often tens of billions of dollars, which is still a big expense for Foxconn, which has already launched a number of projects.
The executive said Foxconn preferred a light-asset chip design business and it was unclear whether it would build a chip plant in the future.
The global semiconductor industry has formed a clear division of labor. Companies such as Taiwan Semiconductor Manufacturing Co Ltd and Samsung Electronics provide chip contract manufacturing services, while there are countless chip design companies in the world. They only need to submit their design plans to contract factories. There is no need to invest in the construction of chip production plants. In the global chip contract manufacturing market, Taiwan Semiconductor Manufacturing Co Ltd is a giant, with more than half of the share.
Big background
A big backdrop to Foxconn's sudden emphasis on semiconductors is that it is making a major strategic shift from traditional consumer electronics contract manufacturers to its own-brand business and higher-tech areas of components and raw materials.
Obviously, chips are the strategic commanding point of the electronics or technology industry. Foxconn hopes to use semiconductor design capabilities to further strengthen the overall scientific and technological strength, increase chip self-sufficiency and increase profit margins.
A few years ago, Foxconn Group coveted Toshiba's flash memory chip business, but Foxconn was unable to acquire it due to Japanese restrictions. In the end, a multinational consortium led by Bain Capital acquired Toshiba's flash chip business.
In addition to semiconductors, another area of zero components that Foxconn is driving is liquid crystal panels. The company is building an LCD panel factory in Guangzhou with an investment of nearly $9 billion, while Foxconn is also building a small LCD panel plant in Wisconsin with an investment of about $10 billion. However, around these two LCD panel projects with huge investment, there have been some adverse rumors about the transfer of factories or strategic contraction. (Tencent Science and Technology revision / Chengxi)